Final year of BPS as transition to Sustainable Farming Scheme begins

The WELSH Government says more than ninety-five per cent of farm businesses have now received their full or balance payment under the final year of the Basic Payment Scheme (BPS), ahead of the introduction of the new Sustainable Farming Scheme (SFS) in 2026.

Announcing the update on Friday (Dec 12), Deputy First Minister and Cabinet Secretary for Climate Change and Rural Affairs, Huw Irranca-Davies, confirmed that over 15,400 Welsh farm businesses have been paid £68.7m. This comes on top of the £160m issued in BPS advance payments since 14 October.

Final round of BPS payments

The Basic Payment Scheme, which has been the backbone of farm support in Wales for a decade, provides direct income support to help farmers plan and manage their businesses. BPS 2025 marks the last year in which full BPS payments will be made before the scheme begins to be phased out.

The Cabinet Secretary said officials would “continue to process the outstanding BPS 2025 claims as soon as possible,” adding that all but the most complex cases should be completed by 30 June 2026.

Payments issued today represent the main balance due to farmers following earlier advances, giving many businesses the cash flow they need during the quieter winter period—traditionally a challenging time in the agricultural calendar.

Shift to Sustainable Farming Scheme in 2026

From 1 January 2026, the Welsh Government will begin rolling out the Sustainable Farming Scheme, a major reform to how agricultural support is delivered. The SFS will reward farmers for environmental outcomes such as habitat management, carbon reduction and biodiversity improvements, alongside continued food production.

The government has argued that the new scheme is essential to meeting Wales’ climate and nature targets while ensuring long-term resilience in the sector. However, the transition has been closely watched by farming unions, who have raised concerns about the administrative burden, income stability, and the speed at which BPS is being phased out.

Mr Irranca-Davies reaffirmed the government’s stance, saying: “This government is steadfastly committed to supporting Welsh farmers to sustainably produce quality food. This is demonstrated today in our payment of the BPS 2025 balance payments and will continue throughout the transition period.”

Sector reaction

Farming unions are expected to scrutinise the detail of today’s announcement, particularly around remaining unpaid cases. Last year, late payments led to frustration in parts of the sector, with unions calling for greater certainty as the industry faces rising input costs, supply chain pressures and continued market volatility.

The move to the SFS remains one of the most significant agricultural policy changes in Wales since devolution. Ministers insist the shift is designed to support both food production and environmental stewardship, while critics warn the transition must not undermine farm viability—especially for family-run livestock farms that dominate rural areas such as Pembrokeshire, Ceredigion and Carmarthenshire.

What happens next

Farmers still awaiting their BPS 2025 balance will continue to be processed “as soon as possible”, the Welsh Government said. Officials will also publish updated guidance on the Sustainable Farming Scheme ahead of its launch.

The coming year will therefore become a pivotal moment for Welsh agriculture, as the long-standing BPS framework—which provided over £200m annually to Welsh farmers—makes way for a new results-based model that will shape the industry for decades to come.

A PEMBROKESHIRE farmer “jumped the gun” in his enthusiasm to build a new cattle shed which includes ‘robot slurry scrapers’ that have been causing a noise nuisance for neighbours, county planners heard.

In a retrospective application recommended for approval at the December meeting of Pembrokeshire County Council’s planning committee, Aled Jenkins sought permission for a replacement cattle housing and silage clamp at Upper Ty Rhos, Wolfscastle.

An officer report said Upper Ty Rhos consists of a herd of 630 youngstock beef cattle, the applicant seeking permission for the replacement 100-metre-long cattle housing building.

It said the building benefits from a robotic scraping system to internally clean it to improve animal welfare and efficiency.

However, the slurry scraper system in operation has been found to constitute a statutory noise nuisance.

“The introduction of the slurry scraper system has resulted in a new noise source to the locality that is having a significant detrimental impact upon local amenity.  The nuisance noise is directly associated with the extended hours of operation of the slurry scraper system and the noise created by the two motors powering the system including the drive mechanism that moves the scraper through the building to remove slurry produced by the housed cattle.

“To further exacerbate the situation, the building has open voids to the eastern gable end, which is within close proximity to the neighbouring property resulting in the building being acoustically weak.

“An acoustic report has been submitted with mitigation methods provided including relocating motors and associated equipment into external enclosures, reduction of noise egress through openings by installing hit-and-miss louvres and/or PVC strip curtains and consideration of blocking the gap between roof pitches along the ridge of the building.”

Three letters of concern were received from members of the public raising concerns including visual and environmental impact, noise issues and a potential for the herd size to increase.

Speaking at the meeting, neighbour Dr Andrew Williams, who stressed he was not seeking to have the shed removed, raised concerns about the noise from the ‘robot scrapers,’ exacerbated by cattle being concentrated in the immediate area from the wider farm complex.

Agent Wyn Harries addressed concerns about the retrospective nature was a result of over-enthusiasm by his client who “jumped the gun”.

He said there was now a scheme that was “fully worked through,” dealing with noise and other issues.

Members backed approval, which includes noise mitigation to address the impact of the robot scrapers; one member, Cllr Tony Wilcox, abstaining on the grounds of the retrospective native of the building “the size of a football field”.

THE FARMER’s UNION OF WALES has sounded the alarm over a sharp and sustained collapse in dairy prices, warning that the situation is placing intolerable pressure on family farms already grappling with regulatory change, rising costs and wider economic uncertainty.

The Union convened an emergency meeting of its Animal Health and Dairy Committee last week to assess the scale of the crisis. Representatives from across Wales reported widespread anxiety, with many members seeing milk prices fall dramatically through the autumn. Processors are now signalling further cuts in early 2026, while commodity markets offer little sign of stability heading into spring.

Farmers, fearful of jeopardising commercial relationships, have approached the FUW confidentially to express grave concern about projected milk payments for the coming months. Many say the offers being made will fall far below the cost of production.

Average milk prices are forecast at just 30–35 pence per litre, against estimated production costs of 39–44 pence per litre (Kite Consulting). On current trajectories, the FUW warns a typical Welsh dairy farm could lose thousands of pounds per month for as long as the downturn persists.

Following its committee meeting, the Union raised the matter directly with Deputy First Minister Huw Irranca-Davies MS during talks in Cardiff on Wednesday, December 3. Officials stressed the immediate threat facing family-run dairy farms and called for urgent consideration of government support to prevent long-term damage to the sector.

Gerwyn Williams, Chair of the FUW Animal Health and Dairy Committee, said the pace of the price crash was “unprecedented”.

“Farmers are facing an impossible situation where input costs remain high while the value of their product plummets. The viability of many family farms is now at serious risk. We need immediate assurances that this crisis is being treated with the urgency it deserves.

“Some can weather a short storm, but rumours that this could continue into summer 2026 will see businesses shut. These modest family farms have already invested heavily to meet regulatory requirements. Cuts on this scale will severely impact their ability to service repayments.”

FUW Deputy President Dai Miles warned that the consequences extend far beyond farm gates.

“Dairy farming underpins thousands of jobs in Wales and is central to the economic, social and environmental fabric of rural communities. When prices fall this sharply, it isn’t just farmers who suffer — local businesses, services and entire communities feel the impact.

“We have made it clear to the Deputy First Minister that government must work with the industry to provide immediate stability and a long-term resilience plan.”

The FUW says it will continue to work with the Welsh Government, processors and supply-chain partners to seek solutions and secure fair, sustainable prices for producers.